Facts of the Case

The petitioner, AVS Infrabuild Private Limited, challenged reassessment proceedings initiated by the Income Tax Department for AY 2014–15. The challenge was directed against:

  • Notice under Section 148 dated 29.07.2022
  • Order under Section 148A(d)
  • Assessment order dated 31.05.2023
  • Demand and penalty notices

The core issue arose because the jurisdictional notice contained multiple fundamental errors, including:

  1. Issuance in the name of a different entity (Apollo Pipes Limited)
  2. Incorrect PAN mentioned
  3. Wrong Assessment Year (2013–14 instead of 2014–15)
  4. Incorrect Document Identification Number (DIN)

The petitioner had already pointed out these errors before the Assessing Officer.

 Issues Involved

  1. Whether a notice under Section 148 containing multiple jurisdictional errors is valid in law?
  2. Whether such defects can be cured under Section 292B of the Income Tax Act?
  3. Whether reassessment proceedings can continue based on a defective notice?

 Petitioner’s Arguments

  • The notice under Section 148 is a jurisdictional requirement, and any defect strikes at the root of jurisdiction.
  • The notice was fundamentally defective due to incorrect name, PAN, AY, and DIN.
  • Section 292B cannot cure such substantive jurisdictional defects.
  • Since the foundation (notice) is invalid, all subsequent proceedings must fail.

 Respondent’s Arguments

  • The errors were due to human/clerical mistakes.
  • The petitioner was aware of the proceedings through an intimation letter.
  • Section 292B should be invoked to cure such technical defects.
  • The intent of the notice should prevail over procedural lapses.

Court’s Findings / Order

The Delhi High Court held:

  • The notice under Section 148 contained serious and multiple jurisdictional defects.
  • These defects were not minor or technical, but went to the root of the matter.
  • If the errors were removed, the notice would cease to exist as a valid legal document.
  • Section 148 notice is a condition precedent for reassessment and must be validly issued.
  • Section 292B cannot cure fundamental jurisdictional defects.

 Final Order:

  • The impugned notice under Section 148 was quashed.
  • Consequently, all subsequent proceedings (148A(b), 148A(d), assessment order, demand & penalty notices) were also set aside.

 Important Clarification by Court

The Court relied on the principle laid down in:

  • Commissioner of Income Tax v Spirit Global Construction Pvt. Ltd.

 Clarification:

  • Section 292B applies only to minor/technical defects.
  • If removing the defect alters the nature or validity of the notice, it cannot be cured.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS28072023CW90882023_140222.pdf

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